Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Refund and Amount of Tax Owed

Refund or Tax Due


The IRS applies the same bottom-up rule to adjust direct deposits for refund offsets for:

  • Unpaid federal taxes, or
  • If the Earned Income Credit (EIC) portion of the taxpayer's refund is withheld pending further review

After the EIC review, if a refund is allowed, it will be direct-deposited in the account listed first on Form 8888.


Bill asks that his refund of $780 be deposited into three different accounts: $300 into Account 1, $300 into Account 2 and $180 into Account 3.

However, Bill owes federal taxes of $290 from an earlier tax year. After this amount is offset, the balance of $490 will be direct deposited as follows: Account 1 will receive $300, Account 2 will receive $190, and Account 3 will receive $0.


Melanie is due a refund of $1,000; $700 of the refund is an Earned Income Credit. She asks that her refund be split into three different accounts: $500 into Account 1, $300 into Account 2, and $200 into Account 3. Melanie's EIC amount of $700 was held pending a review; $300 went to Account 1 and $0 went to Accounts 2 and 3. Later, when the IRS allowed her EIC refund amount, it was deposited into Account 1.